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Medicaid’s Reimbursement Problems Increase As It Expands

Stanley Feld M.D., FACP,MACE

In order to attract more physician participation in Medicaid the Obama administration increased the level of Medicaid reimbursement to Medicare levels in 2013.

The Obama administration anticipated an increase in Medicaid recipients once Obamacare started in 2014.

In 2012 there was not enough physician participation in Medicaid to service the number of patients enrolled at that time. Appointment wait time was long. Access to care was rationed.

To prepare the primary care workforce for the influx of new Medicaid eligible patients established through the Affordable Care Act (ACA, Obamacare), this provision increases payment rates for certain primary care services to at least the level of Medicare in 2013 and 2014.

 At that time CMS (2012) promised states it would pay 100% of Medicaid reimbursement. Therefore the increase did not threaten individual state budgets because the federal government was paying 100% of the bill until 2015.

Many but not all Primary Care Physicians fell for this Obamacare ploy. Many physicians still did not sign up to accept Medicaid patients.

 “According to a survey conducted by The Physician’s Foundation in 2012, declining reimbursement rates are the most “significant impediment to patient care delivery in today’s practice environment by a large margin.

In 2012 a major administrative service provider for Medicaid said,

 “Enhanced payment rates may induce more physicians to participate in Medicaid. According to a survey conducted by United Healthcare, half of primary care physicians would increase their Medicaid case load if Medicaid payment rates were increased to the level of Medicare pay rates.”

There were long waiting times for appointments and decreased access to care in 2012. The Obama administration figured these issues would be cured with the change in reimbursement.

The new increase Medicaid enrollment figures have been an intentional mystery to the public. 

The Obama administration has provided convoluted enrollment figures to the public. These figures have confused everyone including those who are interested in them. I believe it has even confused the Obama administration itself. The non-transparency has prevented everyone from facing the reality of the Obamacare mess.

This analysis of the numbers must be read carefully. Physicians have been faked out once more.

“In the third quarter 2014 health insurance enrollment data show continuation of two trends during the first and second quarters—increasing Medicaid enrollment and declining enrollment in employer plans.

" However, while individual-market enrollment increased substantially in both the first and second quarters, it declined by 357,000 during the third quarter. The net result was 160,000 fewer Americans with health insurance."

These numbers are nowhere near the numbers the Obama administration reported to the traditional media and in turn to the public.

 All the traditional media did was celebrate President Obama’s victory lap. The public was deceived by the victory lap.

  “For the first nine months of 2014, individual-market enrollment grew by 5.83 million, but 4.93 million individuals lost employer coverage—offsetting 85 percent of the individual-market gain.”


 This was not been made clear by the Obama administration. The uninsured number still remains unclear. This analysis points to Obamacare being a total failure.

 Thus, the net increase in private health insurance for 2014 is so far 893,000 individuals. During the same period, Medicaid enrollment grew by almost 7.49 million. Taken together, the number of Americans with health insurance increased by 8.38 million during the first nine months of 2014, but growth in Medicaid accounted for 89 percent of that gain.

The situation has not gotten better now that the Affordable Care Act's bump in Medicaid pay to Medicare levels has expired.

Just seven states kept the higher rates in place for 2015, while the rest reverted to the previous low rates.

 Medicaid rates in virtually every state are a fraction of what will be paid by Medicare and private insurance companies.

 There are only so many hours in a day. How many physician practices could afford to devote their time to serving its lowest-paying patients?

A 2013 physician survey found 33% of physicians refused to see new Medicaid patients while 17% refused to see new Medicare patients. The obvious reason is Medicare pays better than Medicaid.

 With the expiration of higher primary care physician reimbursement it can be expected there will be less physician participation and decreased access to care for the expanding Medicaid enrollment.

The Obama administration anticipates this problem. It has introduced new regulations that it thinks will solve the problem.

It might, or at least help a little, except for the fact that it is going to cost the government more and help make healthcare insurance companies richer.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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